Social aspects of the innovation activity of enterprises
Inna Donova
Reviewing the features of post-soviet industrial innovators would be incomplete with the analysis of the particular social, human components of the innovation process. The existence and direction of changes in the composition of the labour force and labour relations, the character of the demand for labour in the period of innovation, the practices of definition of barriers and the particular features of the motivation of staff are questions which will be examined in this section. Meanwhile, there is a series of substantive and methodological barriers to such an examination which need particularly to be borne in mind. First, both for experts in the enterprises and for field researchers it is quite difficult to distinguish the specific personnel problems of innovation from other problems in the sphere of personnel management. Second, recorded social changes are not always large-scale and measured in statistics, the action of innovation on the social sphere of the enterprise often has an indirect qualitative character which cannot be revealed by quantitative methods alone. Third, both in the development of the innovation project and in the assessment of its results enterprises rarely include ‘social variables’ in the ‘general equation’ of innovation, which is reflected in the well-known atomism and lack of control of personnel processes. However, the realisation of any innovation project has its ‘social cost’ (in the form of the level of mobilisation of the human potential of the organisation, the quantity and quality of problems and barriers arising in relation to the innovation). One can see the social consequences of innovation even beyond their relationship to the realisation of the aims and market success of the innovations undertaken – as a result which can be described in sociological terms (changes in the content of labour, the dynamics of the skill and occupational structure, changes in the type of motivation of employees) and socio-economic indicators (changes in the level of employment, wages and other social payments and compensations, and working conditions).
In this section we will try to review the social aspects of innovation particularly from these two sides – the social costs (influence of personnel and personnel management practices on the course of the innovation process) and social consequences (influence of innovation on personnel and labour relations). From this point of view the social aspects of innovation are the totality of the mechanisms of personnel management in conditions of innovation and the whole complex of their social consequences.
Personnel as an object of management, resource and limiter of the innovation process
Staff barriers and mechanisms of overcoming them in enterprises
At all stages of the research problems appeared in the sphere of personnel management, making the innovation process more difficult or even preventing the origin and diffusion of innovation in enterprises. One can distinguish particular spheres in which such a kind of problems arise.
1. The sphere of formation both of an integrated personnel policy in the general system of management of labour in the enterprise and a specific personnel policy in relation to the innovating subdivisions and workshops. In practice there is no planning of demand for labour, very rarely do we find examples of the realisation of a systematic approach to the resolution of the problem of the reproduction, preservation and support of human potential, the mechanism of recruiting and retaining personnel works badly. It is quite difficult to make judgements about the personnel policy of innovations in conditions in which the enterprise has no overall personnel policy in the enterprise. In previous research reports it has already been noted that the behaviour of the majority of enterprises in the sphere of personnel planning for innovation is chaotic and reactive. As a result we only find procedures for resolving contingent ‘hot’ problems in relation to personnel management. Decisions about staffing are perceived by the management of the enterprise as secondary derivative elements of the central innovation, falling into the sphere of their attention only with an increasing ‘mass’ of innovation consequences and ‘technological effects’ of the innovation. One can only observe conditionally the transformation of the old or the formation of a new logic of personnel management in those enterprises which have undergone deep integrated innovations and the researchers were able to follow one innovation through all the stages of its development. In those cases in which the innovation takes place in particular workshops, it would be more appropriate to speak about the practices developed as adding up to a local strategy. Taking into account one other characteristic of the personnel component of innovations strategies identified in the course of the fieldwork – iterativeness – suggests a generalised designation of the personnel policy in the period of innovation as the path of personnel changes.
2. The sphere of supplying the demand for personnel with the aim of realising the innovation project. Here the problem of attracting (hiring) personnel and the effectiveness of its various channels arises. In turn, the shortage of personnel has a quantitative and a qualitative aspect (demand not simply for a particular number of people, but for workers with particular skill and occupational characteristics).
3. The sphere of management of the existing personnel of the enterprise. In this one can distinguish several groups of problems. First, the tasks of retaining the required employers and giving them the necessary degree of motivation confront the management of the enterprise. Second, they demand the resolution of the problem of increasing the skills of the labour force. And third, questions of ensuring the general manageability of the labour force often arises on the agenda – overcoming particular social-psychological barriers to innovation, the aversion and lack of understanding by employees of the need for and aims of the innovation and also the management of conflicts around innovation.
It is worth dwelling a bit on the features of the perception by management of various personnel problems. The senior managers and specialists in the enterprises that we studies perceived the urgency of resolving personnel problems in their enterprises in a pretty contradictory way. On the one hand, among the characteristics of the possibilities of innovation they emphasised the strong potential of their specialists, the understanding by the collective of the need for technical re-equipment and the mastery of new products as a real valued resource of the enterprise. On the other hand, in practice they often demonstrated a crude and even destructive attitude to this same resource. The consequence of such an approach appears fairly clearly in two spheres – the motivation of personnel and the organisation of labour in innovating sections (these questions will be considered below).
Channels and sources of attracting (hiring) personnel
The demand for new staff arises because of the awareness of management of the exhaustion of the human potential of the enterprise, which appears as the insufficient skills of the existing personnel and the presence of ‘white stains’ in the transforming occupational structure. However, the dearth of specialists of the required skills and level is not always really recognised by the experts or unambiguously related to the innovation process. For example, the absence from the enterprise of specialists with a wide professional horizon might be a barrier to the emergence of innovation at all. Thus, innovation in relation to the additional cleaning of secondary raw materials at Ogni became possible only with the arrival of a new technologist who pointed out that it was possible in principle to resolve this problem. Respondents only to a very small extent recognised and articulated questions of the availability of ordinary staff as a problem.
The vicissitudes of demand. In the working materials at all stages of the research we have noted a specific emergence of ‘hunger for staff’ at different stages of the unfolding of the innovation project. Thus, at the stage of preparation, design and development in the enterprise we observe a strong demand for scientific specialists. Veronika Bizyukova has noted with justice that in the period of mastering new technology and products the significance of marketing and of specialists in marketing (market researchers, market analysts, advertising personnel, designers, trade managers) rarely arises while in the final stages of innovation marketing activity begins to play the leading role and the problem itself becomes more difficult.[1] At the production stage of the innovation, particularly at the stage at which the volume of production is increasing, many enterprises become aware of an urgent demand for competent middle managers (as happened at Ogni), who are able to ensure the constant working capacity of shops and sections when the volume of orders doubles. At this stage demand usually also arises for workers of a particular quality and quantity.
In the analytical materials of the previous stage of the research we have already considered the properties of the use of various sources for the hire of personnel.[2] Having completed the observation of innovating enterprises we can say that the enterprises have a strong commitment to relying on the potential of their own staff and correspondingly prefer internal channels of recruitment. However, one can supplement this central tendency with some new features and details.
· As in the past, external sources of hiring are characterised by their boundedness, small-scale use and narrow specialisation which, in turn, are caused by the disproportions in the supply of labour on the labour market; however, interest in the external labour market is increasing and it can be seen as a source of personnel for innovation in relation to the development in enterprises of systems of intra-firm training;
· Alongside this an ‘open door’ policy (of mass external hiring) most often leads to an increase in spending on intra-firm training. At the same time, it provides the possibility for low-paid workers in the enterprises of work po sovmestitel’stvu (as a result of a policy of internal hiring) providing them with the possibility of earning more in their main workplace (that is, an additional stimulus). This circumstance is one more argument explaining the preference of enterprise management for internal hiring.
· In carrying out simple, non-radical technological innovations (or any product innovations) the enterprises do not experience a shortage of labour and use their own forces; most often they use experienced older workers as a resource (Khimik). Then the mechanism of internal mobility also comes into play.
· A ‘mixed’ model of hiring for innovation (combined with training) is the most widespread and responds to the greatest extent to the demand for flexibility of the internal labour market. Often the demand of the enterprise for unique highly skilled specialists is met through external channels, these workers being in a key position, and staff shortages in innovating subdivisions are met from internal reserves (with the permanent training of the transferred personnel). This happened at Strom, when to install electronic parts of the crane workers were hired from outside, but the remaining workers, having been trained at the training centre of the motorised crane factory, were transferred to the innovation sections from other shops in the factory;
· Temporary hiring (together with the function of regulator of employment) is used in enterprises as a means of ‘mock selection’ of the workers taken on. Their work is observed and they are considered as candidates for transfer to permanent jobs or as candidates for ‘take-off’ (Strom). Enterprises in which the labour of workers of mass ‘lost’ professions, in which as a result of the protracted crisis in similar enterprises there is practically no training in colleges (turners, operatives in engineering factories, weavers) is employed do not use temporary hiring. As a last resort (for example, in Ogni, which had a strong demand for specialists in fire-proofing) the enterprise itself organises internal training of specialists which it cannot find on the external market (‘there are no fire-proofing specialists in the neighbourhood, we develop them here on the job’). Most frequently auxiliary low-skilled workers are hired temporarily.
· Several enterprises experience a strong demand for expert specialists (most often in the spheres of marketing and information technology), but it is very difficult to hire them, even on a temporary basis, because the enterprise does not have the financial resources (as happened at the printers, Akademiya). At the same time, the desire of the management of the enterprise to have young and promising as well as skilled and experienced specialists often looks nebulous. Here the technocratic thinking of management also appears: when it is a question of technology, everybody understands that you can only get good equipment for a large amount of money. But when it is a question of highly skilled specialists who can resolve key problems of the enterprise, the management begins to reveal its stinginess, complaining about financial difficulties and asserting that they will manage with their own resources. ‘But the enterprise itself does not have such personnel, but to bring them in from outside – nobody will come for such money’ (Pokrovka).
Methods of increasing the skills of the staff
In the course of the innovation process virtually all enterprises have a problem of a shortage of highly skilled people. Actually, non-innovating enterprises and subdivisions do not complain of a surplus of quality staff either, but in the period of conducting innovations the value of a competently working, modern-thinking and professionally erudite specialist increases many times over. Innovating enterprises experience a shortage both of the potential of their own staff and of that available on the external labour market. The concrete appearance of the problem of skills at the enterprise ‘Conveyor’, for example, made itself evident in the form of an increase in the grading of the work compared to the average grading of the workers.